3M India Limited v. M/S Karcare

Karnataka HC21 Feb 2026COMAP/183/2025

Case brief

AI extract

What is this about?

3M India Limited v M/s Karcare, COMAP No. 183 of 2025 (Karnataka High Court, 21.02.2026, Vibhu Bakhru CJ & C.M. Poonacha J): commercial appeal under Section 37(1)(c) A&C Act challenging the Commercial Court's setting aside of a sole-arbitrator award (03.06.2024) in a 3M car-care franchise dispute (CCC-Yelahanka; claim Rs. 3,35,50,000/-) on the ground that the award was 'unreasoned'. Held: failure of the Arbitral Tribunal to answer each framed issue is not, by itself, a ground to set aside an award where the reasoning shows the claims were unsupported by any material; no evidence established the claimed loss. Appeal allowed; Commercial Court judgment dated 18.01.2025 set aside.

What did the court decide?

Appeal allowed; the impugned judgment dated 18.01.2025 passed by the Commercial Court (CCH-85) in Com.A.P.No.137/2024 is set aside.

3M India Limited Vs M/S Karcare — Arbitration | Karnataka HC (2026)

What the court decided

AI extract

Outcome

Appeal allowed; the impugned judgment dated 18.01.2025 passed by the Commercial Court (CCH-85) in Com.A.P.No.137/2024 is set aside.

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Issue for consideration

Whether the impugned award is liable to be set aside on the ground that it is unreasoned — i.e., because the Arbitral Tribunal did not answer each and every issue as framed.

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Court's answer

An arbitral award is not liable to be set aside merely because the Arbitral Tribunal did not answer each and every issue as framed; the Tribunal's reasoning here shows that, after evaluating the evidence, it found no material to sustain the claims raised by KAR.

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Ratio / Principle

Since the claim made by KAR was liable to be rejected on the ground that no material sustained it, it was not necessary for the Arbitral Tribunal to examine any further issues.

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Key takeaways

No material on record establishes that KAR suffered the loss as claimed, or that such loss arose from 3M's failure to perform its obligations under the agreements.ratio¶¶86
The controversy regarding the alleged oral plea of novation raised during the proceedings need not be examined; it pales into insignificance once it is accepted that the award's finding — that KAR was unable to establish its claims by any material — is not to be interfered with.obiter¶¶85

Detailed headnote1 paragraphs

High Court of Karnataka (Commercial Appeal No. 183 of 2025; Vibhu Bakhru, CJ and C.M. Poonacha, J; decided 21.02.2026) — 3M India Ltd v M/s Karcare. Appeal under Section 37(1)(c) of the A&C Act against the judgment dated 18.01.2025 of the LXXXIV City Civil and Sessions Judge, Bengaluru (Commercial Court - CCH-85) in Com.A.P.No.137/2024, which had set aside the sole arbitrator's common award dated 03.06.2024 (A.C.Nos.452/2022, 453/2022, 454/2022) dismissing Karcare's claims aggregating Rs. 3,35,50,000/- arising from 3M car-care franchise agreements (FA 2016 / FA 2018) in respect of the Car Care Centre at Yelahanka. Held: (i) an award is not liable to be set aside merely because the Arbitral Tribunal did not answer each and every framed issue, where its reasoning shows that, after evaluating the evidence, it found no material to sustain the claims; (ii) the claim was liable to rejection on that ground alone, making examination of further issues (including the contested plea of novation) unnecessary; (iii) no material on record established Karcare's claimed loss or its attribution to 3M. Appeal allowed; the Commercial Court's judgment set aside.

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COMAP No. 183 of 2025

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 21^st DAY OF FEBRUARY, 2026

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PRESENT THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE

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AND

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THE HON'BLE MR. JUSTICE C.M. POONACHA

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COMMERCIAL APPEAL NO. 183 OF 2025

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BETWEEN:

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3M INDIA LIMITED HAVING ITS REGISTERED OFFICE AT: PLOT NO. 48-51 ELECTRONIC CITY, HOSUR ROAD BENGALURU - 560 010

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Digitally signed by PRABHAKAR SWETHA KRISHNAN Location: High Court of Karnataka

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HAVING ITS CORPORATE OFFICE AT: 5^TH FLOOR, MARKSQUARE 61, ST MARKS ROAD BENGALURU - 560 001 REPRESENTED BY ITS NATIONAL SALES MANAGER MR. U.V. SESHU SAI BABU

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...APPELLANT

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(BY SRI SHUJATH AHMED, ADVOCATE)

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AND:

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M/S KARCARE A PARTNERSHIP FIRM HAVING ITS REGISTERED OFFICE AT: NO.1 & 2, VAISHNAVI LAYOUT VIDYARANYAPURA

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COMAP No. 183 of 2025

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BENGALURU - 560 097 REPRESENTED BY ITS PARTNERS MR. RAMAKRISHNA RAO P. & MR. P.V.V.R. SURESH KUMAR

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...RESPONDENT

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(BY SRI SAMPATH BAPAT, ADVOCATE)

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THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13 (1-A) OF THE COMMERCIAL COURTS ACT, 2015, R/W. SECTION 37 1(A) OF THE ARBITRATION AND CONCILIATION ACT, 1996 PRAYING TO PASS AN ORDER TOWARDS SETTING ASIDE THE IMPUGNED JUDGMENT DATED 18.01.2025 PASSED BY THE HON'BLE LXXXIV CITY CIVIL AND SESSIONS JUDGE AT BENGALURU (COMMERCIAL COURT - CCH-85), IN THE COM.A.P. NO.137 OF 2024 & ETC.

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THIS COMMERCIAL APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER:

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CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA

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C.A.V. JUDGMENT

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(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

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The appellant [hereafter, ‘ the 3M ’] has filed the present appeal under Section 37(1)(c) of the Arbitration and Conciliation

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COMAP No. 183 of 2025

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Act, 1996 [ A&C Act ], impugning an order dated 18.01.2025 passed by the learned LXXXIV Additional City Civil and Sessions Judge, Bengaluru [ Commercial Court ] in Com. A.P.No.137/2024.

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The respondent [hereafter, ‘ KAR ’] had filed the said application to set aside the award dated 03.06.2024 in A.C.Nos.452/2022, 453/2022, 454/2022 [ impugned award ] delivered by an Arbitral Tribunal comprising of a sole arbitrator [ Arbitral Tribunal ]. The current commercial appeal (COMAP No.183/2025) pertains to the claims made in A.C.No.454/2022.

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The impugned award is a common award passed in three arbitral proceedings. The Arbitral Tribunal had noted that the evidence and documents relied upon by the parties were common and therefore, the disputes involved are materially similar. Accordingly, the three arbitral proceedings were consolidated.

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KAR was a claimant before the Arbitral Tribunal and had raised several claims arising from the franchise agreement entered into by the parties. The parties had entered into a memorandum of understanding dated 30.11.2015 and, pursuant thereto, entered into a Franchise Agreement dated 29.02.2016 [ FA 2016 ]. Subsequently, parties entered into a Memorandum of Understanding [MOU] dated 04.04.2017 and, in furtherance of the

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COMAP No. 183 of 2025

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said MOU, entered into a franchise agreement dated 06.12.2018. The said agreement was not stamped; therefore, the parties entered into a similar agreement on 31.12.2018 [ FA 2018 ], which was duly stamped.

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Under the FA 2016 and FA 2018, the KAR was authorised to set up and operate Car Care Centres [ CCC/s ] for providing detailing services under the 3M brand [ Franchise Business ] using 3M products and use the brand name 3M in respect of the authorised units conducting business at.

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KAR opened three CCCs under FA 2016/FA2018 at the following locations:

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(i) Electronic City (BPCL);

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(ii) Amruthahalli (IOCL); and

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(iii) Yelahanka

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The present petition pertains to CCC-Yelahanka. KAR claimed that 3M had breached the terms of the franchise agreement, resulting in KAR incurring losses. Accordingly, KAR raised a claim for a sum of `3,35,50,000/- for loss allegedly suffered in connection with the CCC operated at Yelahanka.

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COMAP No. 183 of 2025

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KAR also filed separate claims aggregating 2,52,50,000/- in respect of the CCC at Electronic City and 2,28,50,000/-in respect of the CCC at Amruthahalli. As noted above, the impugned award is a common award in respect of the claims in respect of the three CCCs. However, separate applications were filed by KAR for setting aside the impugned award. The learned commercial court allowed the said applications by similarly reasoned but separate orders.

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FA 2016 and FA 2018 included arbitration clauses. In view of the claims and the disputes that had arisen, KAR issued a notice dated 21.12.2020 calling upon the 3M to appoint an arbitrator. Thereafter, the KAR filed a petition under Section 11 of the A&C Act before this Court in (Civil Miscellaneous Petition No.163/2021) seeking appointment of an arbitrator. Similar petitions were filed in respect of claims relating to other CCCs.

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In the said proceedings, the KAR relied on the Franchise Agreement dated 06.12.2018, which was admittedly superseded by FA 2018. 3M had participated in the said proceedings and conceded to the appointment of an arbitrator to arbitrate the disputes under FA 2018. The said contention was accepted, and an Arbitral Tribunal was constituted.

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COMAP No. 183 of 2025

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Before the Arbitral Tribunal, KAR filed statement of claims alleging that 3M was responsible for the delays in inaugurating its store. KAR alleged that 3M had deliberately suggested modifications to the interior design after the work had been completed. This resulted in additional expenditure. The CCC opened on 07.03.2017, and the KAR had to bear the staff’s salaries, rentals, and other overhead expenses due to the delay.

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KAR also claimed that another person had opened a centre providing similar services in the immediate vicinity of the CCC and had unauthorisedly put up 3M signage, which adversely affected its business. KAR claimed that 3M had failed to take any action against unauthorised use of its brand name, which had adversely impacted KAR’s business. It claimed that persons visiting the unauthorised store posted adverse reviews on social media, which adversely affected KAR's business, as the customers coming across adverse reviews avoided availing services from KAR . In the aforesaid context, the KAR raised the following claims:

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(i)	Capital expenditure	Rs. 83,50,000/-
(ii)	Idling expenditure from August 2016 to February 2017	Rs.37,00,000/-

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COMAP No. 183 of 2025

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(iii)	Damages due to allowing Parallel Unit to operate in the vicinity of Claimant unit. Adhoc amount	Rs.50,00,000/-
(iv)	Reimbursement of Bank guarantee Illegally Invoked by the Respondent	Rs.10,00,000/-
(v)	Loss of goodwill due to bad reviews of the parallel unit	Rs.1,55,00,000/-
	Total	Rs.3,35,50,000/-

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3M had filed its statement of defence raising several issues. 3M claimed that the KAR was an unregistered firm and therefore, was precluded from instituting action against 3M. It further claimed that even if it was accepted that the KAR was a registered firm, it could not maintain any action as in terms of the partnership deed dated 07.03.2019 as its business was to "invest/purchase the land/industrial land, hotels, stocks, forex, dealers, consultant, travel agent, renting of properties etc." The partnership deed did not authorize KAR to carry on the Franchise Business which is "automobile detailing, cleaning or maintaining of vehicles". It also stated that in FA 2018, the KAR was described as a sole proprietorship concern of Mr Ramakrishna Rao. 3M claimed that the disputes raised were not arbitrable as under the FA 2018, KAR had undertaken to incur all costs and expenses for setting up the CCCs and was solely responsible for developing and conducting its

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COMAP No. 183 of 2025

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business. 3M denied that it had breached any terms of FA 2018. 3M also contended that the statement of claims did not contain material particulars.

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3M also stated that initially a notice dated 13.07.2020 was issued by the KAR claiming an amount of 8,28,90,351/- which was subsequently scaled down to 2,05,80,351/- in the subsequent notice dated 21.12.2020; however, the statement of claims was filed claiming that an aggregate amount would be `3,35,50,000/-.

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Both parties also led evidence before the Arbitral Tribunal.

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The Arbitral Tribunal found that the KAR had taken inconsistent positions and that there was no evidence to support its claims. In view of the above, KAR’s claims were dismissed by the impugned award.

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KAR filed an application to set aside the impugned award before the learned Commercial Court (Com.A.P.No.137/2024). The learned Commercial Court set aside the impugned award on the ground that the Arbitral Tribunal had not answered all the issues.

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The only question that falls for consideration of this Court is whether the impugned award is liable to be set aside on the ground that it is unreasoned. At the outset, we may observe that the

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COMAP No. 183 of 2025

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statement of claims filed by the KAR is sketchy, and the claims are not clearly articulated. For instance, KAR claims it suffered losses, and 3M is liable to reimburse them. However, the statement of claim did not specify particulars of the losses suffered. Illustratively, the Statement of Claims mentions capital expenditure of `83,50,000/-, but it neither specifies the nature of the capital expenditure nor the manner in which it is computed. It provides no clue as to, on what items, the said expenditure was incurred.

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As noted above, 3M had filed its statement of defence raising several objections including as to the locus of the KAR to make a claim.

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Based on the pleadings of the parties, the Arbitral Tribunal had framed the following issues for consideration:

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"1. Whether the claimant being an unregistered Partnership Firm, can sue under Law?

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Whether the Claimant has the locus-standi to institute the present proceedings?

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Whether the disputes between the parties are arbitrable in nature?

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Whether the Claimant has any cause of action to file the present statement of claim?

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Whether the Claimant is entitled to any amounts as claimed?

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Whether the Respondent is entitled to costs as claimed?

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What order or award?"

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COMAP No. 183 of 2025

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As rightly noted by the learned Commercial Court, the Arbitral Tribunal did not proceed to answer each and every issue as framed. However, we do not concur with the learned commercial court’s decision that the impugned award is liable to be set aside on that ground alone. It is clear from the reasoning that, after evaluating the evidence, the Arbitral Tribunal found that there was no material to sustain the claims raised by KAR.

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In view of the said finding, it was not necessary for the Arbitral Tribunal to examine any further issues as the claim made by the KAR was liable to be rejected on this ground alone.

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The learned counsel appearing for KAR contended that the Arbitral Tribunal had grossly erred in the proceedings by raising an oral plea of novation. He submitted that it was the 3M's contention that if the FA 2018 was found to be invalid, the franchise agreement dated 06.12.2018 would be operative. He submitted that the contention was raised as 3M had contended that FA 2018 was invalid. He stated that in the aforesaid context, the KAR had taken a stand that if FA 2018 is held to be invalid, the earlier franchise agreement ought to be considered as binding between the parties. He contended that KAR could not be faulted for not

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COMAP No. 183 of 2025

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making any averments to that effect in its pleadings, as the said contention was raised to counter the submissions advanced on behalf of 3M.

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In our view, it is not necessary to examine the aforesaid contention as these controversies pale into insignificance once it is accepted that the impugned award to the extent it holds that the KAR has been unable to establish its claims by any material, is not required to be interfered with.

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We find no material on record to establish that KAR suffered the loss as claimed or that such loss arose from 3M's failure to perform its obligations under the agreements.

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In view of the above, the present appeal is allowed and the impugned order is set aside.

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Sd/(VIBHU BAKHRU) CHIEF JUSTICE

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Sd/(C.M. POONACHA) JUDGE

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KPS

3M India Limited v. M/S Karcare

Case brief

What is this about?

What did the court decide?

3M India Limited v. M/S Karcare

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

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